By: Nick Montoni, Senior Policy Program Director
As the changing federal policy landscape impacts solar and wind projects, infrastructure initiatives, and tax incentives for solar, wind, electric vehicles, energy efficiency, and more, a topic that gets lost in the shuffle is funding for energy science and applied energy research and development (R&D). The FY25 budgets reflect a major shift of R&D funds away from solar; wind; vehicles; buildings; hydrogen; nuclear fuel and reactor research; point-source carbon capture; carbon utilization, transport, and storage; basic energy sciences; biological research; and workforce development for scientists; those funds were shifted into other administration priorities. In an even starker shift, the FY26 budget proposal recommends cutting R&D funds into almost every major energy technology and scientific pursuit by billions of dollars.
With the federal government stepping away from advancing energy R&D, what about the states? The National Science Foundation (NSF) tracks R&D spending across all 50 states and Washington, D.C. and publishes statistics in an annual report. In 2023, total R&D expenditures by states across the U.S. were around $3 billion, with state and local governments and non-profits providing $2.2 billion of that. The picture is less clear for energy R&D: total expenditures were $373 million, though it’s unclear how that is broken up across source of funds (federal vs. non-federal) or performers (state agency, higher ed, businesses, etc.). The NSF or a very ambitious non-profit should consider expanding this survey to include more granular data on this topic.
Regardless, with both direct federal funding of energy R&D and federal pass-through dollars to states likely shrinking in the coming years, states may need to create their own R&D programs and find funding for them. Below are some examples of state R&D programs. They are by no means exhaustive, though they cover a number of interesting mechanisms and funding sources.
| State | Program Description | Funding Source |
|---|---|---|
| CA | The Electric Program Investment Charge (EPIC) Program provides grants for energy R&D across sectors including efficiency, renewables, grid integration, vehicles, and more. For 2022-2025, EPIC has an authorized research budget of $500 million. | Utility Surcharge |
| NY | In 2025, the New York Clean Energy Fund, which is administered by NYSERDA, has been authorized to support up to $630 million in research projects. | Utility Surcharge |
| ND | Each biennium, the North Dakota legislature authorizes $3 million for energy R&D projects, particularly in the areas of wind energy, biofuels (ethanol & biodiesel), biomass, advanced biofuels, and other advanced technology. | State Appropriation |
| OH | Ohio created a nuclear development authority that will review nuclear energy R&D projects. The group’s initial funding was $750,000. Ohio also maintains a coal R&D program that in 2025 provided $6 million. | State Appropriation |
| TX | Texas recently expanded R&D tax credits, which means businesses and non-profit research institutions are incentivized to invest more in R&D. Texas also has an innovative energy demonstration program and an energy incubator program, but it’s unclear how much money flows through these mechanisms. | State Appropriation; Tax Credits |
| WA | For the 2025-27 budget cycle, the Washington State Department of Commerce has set aside $5 million for a potential competitive RD&D funding opportunity. The Research, Development and Demonstration (RD&D) solicitation is anticipated to open in January 2026. This program combines multiple pre-existing funding streams, including the Clean Energy Fund which used to provide around $13 million per biennium in state appropriations. | State Appropriation |
| WY | Wyoming offers a number of grants to all kinds of energy projects, including R&D. However, this program is not uniquely dedicated to R&D. | State Appropriation |
These programs are just a few representative examples of ways that states can use their budget authority and revenue-raising powers to create R&D programs that support scientists and innovators. States can support the American scientific enterprise and the American economy independently of federal financial assistance. Funding for non-profit research institutions, high-tech companies, and institutions of higher education advances the discovery of new energy technologies, the testing of new methodologies for implementing and deploying energy technologies, and the recruiting and training of the next generation of the scientific workforce.
As mentioned previously, there are gaps in data collection on state-funded R&D for energy technologies. There is another opportunity here for states and interested stakeholders to band together to track R&D allocations and efforts that are not dependent on federal dollars. In doing so, we gain a better understanding of how states support clean energy innovation and how we can continue to support the American scientific enterprise.